Why now is a good time to invest in Chinese wine

Special supports for the vines, in the eastern foothills of Helan Mountains, make it easy to cover them during cold wintersCredit:
China Daily

3 October 2017 • 9:00am

Li You

Pioneering Chinese wineries such as Chateau Mihope are leading the way in attracting investment from other industries.

The eastern foothills of Helan Mountains in the Ningxia Hui autonomous region, one of the golden areas in China producing wine, is attracting investors from other industries in China.

In September 2016, Chateau Mihope was launched there. Midea Group, a leading electronic appliance company, is the biggest shareholder in the winery. The construction of the winery kicked off in 2012 and the total investment was 200 million yuan (£22 million).

Aiming to establish itself as a model Chinese winery, Chateau Mihope invested in the entire value chain, including viticulture, winemaking, wine marketing and wine culture communications. “Ningxia is gaining worldwide fame nowadays,” said Li Jialong, general manager of the winery. “And more and more high-profile professionals are participating in the winemaking industry.”

We will strive to cultivate a number of model wineries and good star wines

Richard Smart, an Australian viticultural consultant who has been working in vineyards for 52 years, is supervising the planting of the grapes in Chateau Mihope. “Ningxia has a very special advantage with its alluvial and gravel soils, which have been washed down from the Helan Mountains,” Mr Smart said.

Besides the soils, Ningxia has a summertime climate similar to many wine regions, which is warm with limited rainfall, which is good for wine quality. The growers can regulate scarce water supplies through irrigation, which is critical for quality. Very cold winter temperatures can damage the vines, so it is necessary to bury them, an operation which can now be mechanised, Mr Smart said.

“My experience from elsewhere in the world tells me that we can improve yields and quality in Ningxia by using a new system of training the grapes,” Mr Smart said.

Chateau Mihope has introduced a special trellis system. This lifts the grapes away from the soil, and also exposes the bunches to sunlight, which is important for quality, according to Mr Smart. As for the grape varieties, the focus in Ningxia is on cabernet sauvignon and merlot, according to Mr Smart. But syrah as well as marselan have the potential to become China’s signature varieties.

The Australian consultant said Ningxia had a bright future as a wine region and perhaps in 30 years, it would be known around the world as a quality region. “For now, I see new investors placing great emphasis on very elaborate and beautiful chateau-style buildings, and very sophisticated winery equipment,” he said. “I think more emphasis should be given to the vineyards, as we are doing at our winery, where we are improving the training system and irrigation as a start,” Mr Smart added.

“I also want to work with the Chinese staff there for longer, so that I could show these ideas to students and vine growers.” Cao Kailong, head of the Administration of Development of the Grape Industry of Ningxia, said that in 2016, the sales revenue of the Ningxia wine industry reached 5 billion yuan (£562 million).

“From the perspective of developing the market, Helan Mountains should go further in branding and marketing the region,” Mr Cao said. “We will strive to cultivate a number of model wineries and good star wines, to promote the general quality of the Helan Mountains wine brand.”

Experts said it was necessary for big companies such as Midea Group to participate in Ningxia’s wine industry. They would help it on its way to becoming international, high-end and renowned. Midea’s participation, they said, would attract more entrepreneurs to launch their own wineries in the region. In this way, the wine industry in Ningxia could develop in a healthy and sustained fashion.